in the labour court of south africa held in johannesburg ... · in the labour court of south africa...
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IN THE LABOUR COURT OF SOUTH AFRICA
HELD IN JOHANNESBURG
CASE NO: P 378 / 03
In the matter between:
Desiree Jafta Applicant
and
Commission for Conciliation,
Mediation and Arbitration
1stRespondent
Botha Du Plessis
2ndRespondent
Makro SA (Pty) Ltd 3rRespondent
JUDGMENT
CELE AJ
Introduction
[1] This is an application in terms of section 145 of the Labour
Relation Act 66 of 1995 (“the Act”), for the review and setting
aside of an arbitration award dated 19 August 2003 issued by the
second respondent wherein he found the dismissal of the applicant
by the third respondent to have been procedurally and substantively
fair.
Background facts
[2] The facts of this matter as presented during the internal disciplinary
and the arbitration hearings were not the simplest of the facts when
it came to the implementation of the stock movement of the third
respondent. Yet they were germane in the resolution of the dispute
between the parties. A repeated reading of the fairly long record
became inevitable. The applicant was employed by the third
respondent as a returns clerk in the goods receiving department at
the Port Elizabeth branch. She was charged with the responsibility
of recording the movement of stock sent to supplies and of repaired
items received back from suppliers.
[3] The third respondent is a wholesaler, selling in bulk to its
commercially affiliated customers, to traders and to end users of
the product which it was selling. The shop premises of the third
respondent, in Port Elizabeth had different departments, including:
i) The receiving end;
ii) The sales floor;
iii) The front returns;
iv) The damages area;
v) The goods returns cage.
2
The receiving end:
Employees of the third respondent called “buyers” placed orders
and the suppliers received such orders and they generated invoices
for the third respondent. The suppliers would then deliver the stock
through the receiving end where particulars of such stock would be
booked into the computer system of the third respondent, resulting
in the administrative office thereof being notified of the fact of
such delivery. A proof of delivery document would be generated
which had to match with the suppliers invoice in respect of the
stock delivered. A copy of the proof of delivery would be handed
to the supplier’s driver. The receiving end would then transfer the
stock to the sales floor.
The sales floor:
This is the area where the stock would be displayed for the public.
At that stage a computer recordal would show what stock had been
transferred and what was on display to the public. The third
respondent used various codes for its departments with S001 being
the sales floor.
The front returns:
Where an item purchased was returned by a customer for repairs, it
would be received through the front returns. If the item was to be
repaired and returned to the customer it would not form part of the
stock holding. It would be repaired and returned to the customer
through the customer returns area. Such goods would have gone
through the goods return cage.
The damage area:
3
There was stock which the third respondent had to write off
because of the extent of its damage. That would be stock which it
could neither sell nor return to the suppliers and it had decided to
take a loss on. The damage area was referred to as S004.
The goods return cage:
This area was used by the third respondent to provisionally keep
stock which had to be repaired or returned to suppliers. The third
respondent placed a clerk or clerks in charge of this section. It was
a fenced off area, entry to which was limited to the clerk(s) based
at it. Duties of the returns clerks included the receipt and
dispatching of goods from either the front returns or the sales floor
to the suppliers. The reason for the dispatch of the goods to the
suppliers would either be for:
repairs in which case the (returns clerk) had to
generate a goods repair note for the goods in
question and then send it to the relevant
suppliers, or
returns in which case the (returns clerk) had to generate a goods return note and then send it to the relevant supplier.
[4] Once a supplier had repaired an item it returned it to the third
respondent, through the returns clerk. Where an item was returned
to the supplier, the third respondent would either be credited for it
or it would be replaced.
[5] In the business of the third respondent stock would be moved either
internally or externally. Such movement was referred to as posting.
4
Internal posting that is movement of stock from one
department to another, as from sales floor
to the cage, from the front returns to the
cage and visa versa. Stock would also be
moved from the cage to S004 location.
External posting that is movement of stock to and from the
suppliers.
it also related to inter branch transfers per
stock transfer order – the STO. An
example was a transfer of stock from the
P.E branch to Milnerton branch in Cape
Town.
[6] If the posting system and the employees of the third respondent
worked well, physical stock in very department had to correspond
with a recordal thereof, known as the inventory of storage location
report. Everytime posting of stock was done, the system was able
to generate a posting document on which the recipient of that stock
would sign to acknowledge receipt of such stock. The system also
generated stock movement history through which the movement of
any article could be traced. The returns clerk was in charge of all
records in the cage department.
[7] Each and every employee of the third respondent who worked on
the computer system of the third respondent had a user name and a
unique identity number or code, which enabled access to the
computer system of the third respondent. The computer system of
the third respondent worked in such a manner that any transaction
effected on the computer recordal was identifiable with the user
name and code (profile) used in gaining access to the system at that
5
time. In terms of the policies and practices of the third respondent,
none off its employees was allowed to use the profile of another
and every employee was responsible for transactions executed with
his or her profile. The computer system of the third respondent was
referred to as the SAP system. Each time the computer system was
down, transactions had to be recorded manually. Once the
computer system was up and running, there had to be an update
and the manual recordal had to be kept on file with the relevant
computer records clipped thereto.
[8] A returns clerk had access to all reports in the cage department and
had to check the physical stock in the cage, at least once a week if
not daily, against the records.
[9] The third respondent engaged the services of a private security
company to control the stock movement at its premises, such as in
Port Elizabeth. In the cage department, whenever a security officer
or a driver of a supplier brought in stock, the returns clerk had to
sign to acknowledge receipt thereof. When a returns clerk prepared
stock to dispatch to suppliers or to one of the branches for
whatever reason, a security officer had to check such stock during
the packaging and dispatching processes. The security officer
thereafter had to append his or her signature on a relevant posting
documentation as declaration of having done the checking. Any
person who received stock from the returns clerk also had to sign
on an appropriate posting record to acknowledge such receipt.
Apart from records kept by the staff of the third respondent, the
security company kept its own records for the stock movement
where their officers were involved.
6
[10] The applicant was a goods returns clerk at the times material to this
matter. She reported to Mr Robb. There were times when she was
given clerks to assist her in the cage department.
[11] The shop of the respondent had serious stock shrinkage problems
which it estimated at 0,25% at its Port Elizabeth branch alone. In
monetary terms this shrinkage was estimated to come to R 600 000
to R 700 000 per year. The shrinkage problem was attributable to
such factors as theft, stock losses, improper handling of
documentation and improper handling of stock.
[12] The third respondent ran an inductiontraining course for its staff
and various topics were covered in such training, including
shrinkage awareness. The applicant also underwent such a training
course. On 7 May 1999 the third respondent issued a letter to the
applicant purporting to record a counselling of the applicant by the
third respondent which would have taken place on that day against
failure of the applicant to adhere to company procedure on stock
handling. She was warned against further breaches of company
procedures failing which disciplinary action could be taken against
her.
[13] On 17 July 1999 the third respondent issued another letter
addressed to the applicant to inform her that she was to be
restrained in the returns procedure. The letter said that the applicant
had failed to promptly action all the returns in the area, which
failure allowed for a possibility of shrinkage and unnecessary
damages.
[14] On 30 January 2001, the third respondent issued another letter, also
addressed to the applicant expressing concern with the amount of
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stock which was said to be allowed to pile up without being
returned timeously. The effect of allowing the stock pile up was
given as resulting in housekeeping in the area as not being in
satisfactory standard.
[15] On 19 April 2002 another letter was issued by the third respondent
which it addressed to the applicant. It concerned counselling of the
applicant for poor work performance in relation to housekeeping
standard pertaining to stock. Certain items were identified as of
missing documentation which ought to have been in the repairs
file. Numbers of these were given as 4900010505; 4900269521;
4900116649; 4900017509. It was also said in the letter that there
were a number of goods return notes that could not be accounted
for in the files. The letter recorded that an investigation was
underway which might result in an enquiry being held into
applicant’s negligence. Later, a selected extract of high value items
allegedly not found in the cage was drawn and given to the
applicant as a matter of priority to investigate.
[16] On 24 April 2002 the third respondent issued a notification of a
disciplinary enquiry to be conducted against the applicant who then
signed a declaration as acknowledgement of the receipt of such
notice on 26 April 2002. The date of the enquiry was set as 27
April 2002 at 14h00 and the act of misconduct she was charged
with was “gross negligence”. Inter alia, in respect of the high
value items as per drawn list.
[17] The record of the proceedings does not have any responses of the
applicant to all the letters of the third respondent up to the time that
she was charged with acts of misconduct.
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[18] One Ms Lez Pramjeeth was the chairperson of the internal hearing
in which one Mr Mfaniseni Nobinda was the initiator; one Mr
Benjamin Ndawo represented the applicant. Mr Mpumzi Lusi was
an observer. The third respondent called two witnesses, Mr
Stephan Robb and Mr Sarel Myburg. Ms Pramjeeth found the
applicant to have committed the act of misconduct with which she
was charged and on 30 April 2002, dismissed her. The applicant
lodged an internal appeal, the hearing of which was held on 31
May 2002 and on 19 June 2002. The chairperson, Mr Willem
Rossouw, suspended the dismissal of the applicant for two weeks
to allow her to prove her theory about the missing stock, to the
management. On 19 June 2002, Mr Rossouw issued a letter,
addressed to the applicant as an outcome of the appeal hearing
which had been held on 31 May 2002 and 12 June 2002. Mr
Rossouw stated in the letter, inter alia, that the applicant was
unable to prove her theory with the result that the stock was still
missing or short. In the last part of the letter he upheld the decision
of dismissal of the applicant. A dismissal dispute then arose
between her and the third respondent. The applicant referred that
dispute to the Commission for Conciliation, Mediation and
Arbitration (“The CCMA”) for conciliation, which unfortunately
was not successful in resolving the dispute. The applicant was
issued with a certificate of nonresolution and she referred the
dispute to arbitration.
The arbitration proceedings:
[19] Legal representation was allowed for the parties and so, Mr Forbes
appeared for the applicant while Mr Wade appeared for the third
respondent. The only witness called by the third respondent was
9
Mr Nobinda, a Goods Receiving Manager at Makro Port Elizabeth
branch. To the extent that evidence of Mr Nobinda sought to
implicate the applicant with acts of gross negligence, it was to the
effect that:
• He was transferred from Sandton to Port Elizabeth Branch
of the third respondent on assignment, to sort out problems
relating to stock shrinkage which the Port Elizabeth branch
was going through.
• He learnt that the SAP computer system of the third
respondent, in the branch, was experiencing operational
problems resulting at times, in a failure to post stock. Such
stock was limited to the first three months of the system.
• The system was in fact very basic and was devoid of any
problems as alleged. On the contrary some staff failed to
follow simple procedures resulting in there being perceived
problems. Mr Robb was incorrect when he conceded to
such problems.
• No documentary proof was generated when stock was
posted from S001 to S002 locations. He directed that when
such posting was done, a computer printout was to be
generated at S002. That alerted the returns clerk of stock
which was to be brought to her long before it was
physically brought. She had then to check the inventory
against the physical stock, once it was brought to the cage.
• Everytime the applicant had problems in posting stock
through the computer system, she had to log a telephone
10
call with the administration personnel. That would
evidence those occasions when she had problems and that
was the evidence tendered by Mr Robb at the internal
disciplinary hearing. The absence of the telephone logging
indicated a failure on the applicant to report any problems
which she perceived were existing.
• The posting of stock which was at the sales floor from
S001 for repairs was an act of negligence by the applicant.
She had to first accept such stock into the cage and into her
S002 and from there, post it for repairs or as returns to
suppliers. Once the stock came back from repairs she had
to receive it into the cage and into her system and
thereafter post it to S001 where it was to be sold and had to
see to the signing of all relevant documents.
• There was staff of the third respondent called “buyers” who
were charged with buying stock for sale. When they placed
orders they had to indicate the department where that stock
would go to once it was delivered. There was a bulk of
stock which was erroneously destined for the cage. Such
stock was never physically brought to the cage when
delivered. It was taken to the sales floor which created a
surplus of stock there and a shortage thereof in the cage, in
the computer system. Once that was discovered, such stock
was posted appropriately to S001 in the computer system
to balance up. Where that was done, instead of having a
date of posting, the system wrote a number of zeros. There
was no negligence on the part of the applicant in that
situation and such stock was not included in the charge.
11
• In respect of 13 big air coolers which were sent to the cage,
the applicant ought to have entered all 13 into her system
but she instead entered 10. Thereafter she attempted to post
out for repairs 13 out of her system. The system recognized
only 10 and rejected the posting of 13. After adding 10 into
the system, she had to add 3 more and would successfully
post out 13 coolers without a problem. There was therefore
nothing wrong with the system.
• In respect of stock which the third respondent purchased
from international suppliers, it had local agents to whom
such stock would be sent for repairs. The posting of such
stock was the same as that of the local stock, even when it
had been returned by its customers. There were suppliers
who came to the branch and did indoor repairs of their
stock.
• The Milnerton affair:
the Milnerton branch of the third respondent was short
of certain stock whereafter an order thereof was
placed with the Port Elizabeth branch. The applicant
prepared documentation and packed the stock which
was ordered. The security officer who worked with
her did not sign documentation to evidence the
checking during the packaging. Another security
officer was present when the stock was dispatched and
he only counted the number of boxes which were to be
sent away. The applicant signed the posting
documentation to say that the stock and the quantity
thereof were correct. When the sealed stock arrived in
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Milnerton, it was established that there were stock
lines which had a shortage and some had a surplus of
what had been sent. It was a mistake of a different
kind which was committed by the applicant, whose
duty was to verify the quantities of stock sent to
Milnerton.
• There are listed high value items which were subsequently
found. Stock with item number 4403 was found on the
sales floor location S001 and was balanced with one sent
out on repairs through location S002. A palm top hand held
organizer with stock number 2437760 was found in the
cage after a correct article number was punched into the
computer system. The discovery took place after the
applicant had been briefly reinstated by the chairperson of
the internal disciplinary appeal. During that 10 days
reinstatement, the applicant was unable to adequately
explain any other articles mentioned in the high value
stock list. There was a stock movement history relating to a
number of Hoover Titan Cylinder vacuum cleaners, yet the
applicant failed to account for 2 similar vacuum cleaners
which were supposed to be on S002. A computer and 2
Canon Cameras which were part of the high value stock
list, were subsequently found and the balancing of stock
was done. In respect of other items in the high value stock
list, for which she was charged, the applicant did not
produce a single document showing that such items had
been given to somebody who acknowledged receipt for
that item. These are items on the list for which she was not
charged.
13
• After the dismissal of the applicant, more stock was found
which she had failed to account for. Such included the
Estia Domestic Appliances. Evidence of it was produced to
show that reinstatement would not be an appropriate relief,
in the event a finding in her favour was made.
• There was stock, the records of which were processed
through the profile of Mr Robb. The applicant was held
responsible for that stock because she admitted that she
was the one who had sent it for repairs.
• The applicant was ill at some stage and took a day off, in
her absence, some items were found on the sales floor
without a proper posting by the applicant.
• Since the dismissal of the applicant, work in the cage
location was going on smoothly with one operator.
[20] Once the case of the third respondent was closed, the applicant
called Ms Veliswa Ndyimbana who worked with the applicant
from 2000 in the cage location after her post in the receiving gate
had become redundant.
[21] The evidence led by the applicant through Ms Ndyimbana was to
the effect that:
When she started working at the cage location with
the applicant, she had not been trained into the SAP
computer system but was then given about three
weeks’ training. The stock in the cage was full, it was
a mess and there was a lot of stock, some of which
14
was outside, such as large appliances which they
could not accommodate inside.
In relation to whether there were problems with the
SAP system refusing to allow some goods to be
punched out from S002 to vendors, she did not know
if the problem was with the SAP system. In respect of
the applicant, they had found that the stock which was
purportedly transferred from S001 to S002 had not in
fact been posted in the system and yet the stock had
been brought to the cage. They had then thought that
the stock was in the S002 computer system and
attempted in vain to post it out from S002.
Mr Nobinda introduced a change so that a print out
would be made for the transfer of stock to S002. They
would then compare the information on a print out
with the physical stock brought to them.
Some of the problems experienced in the cage location
occurred at the front returns. Mr Nobinda instructed
the front returns staff to stop posting stock to S002
and instructed the returns clerks to do the posting into
their location themselves when stock came from S001.
When the work in the cage was manageable, Mr
Nobinda reversed the system by telling the front
returns staff to do the posting which was followed by
a print of the data in the cage location.
The front returns staff used a Loss Prevention
document that the security officers working at the
15
shop would bring to the returns clerks when stock was
posted to the cage. Verification of the stock was done
physically and if confirmed against the document it
was handed back to the security who in turn had to
take it back to the front returns for their record
purposes. When the loss prevention document posting
stock to the cage was unsigned, it could mean that the
stock was never physically sent to the cage, or that a
mistake was made in the posting process.
Every stock sent to suppliers had to be recorded in the
cage system and paper work accompanying the stock
had to be properly endorsed. Stock coming from
repairs was first received by the returns clerk who had
to make entries in the cage records of such receipt and
had to transfer it to the front sales with the staff in the
front sales signing to acknowledge receipt. Manual
documents were used in the event there was a problem
with the computer system. Where company
procedures were not followed, the staff could be held
liable for negligence.
[22] In her own testimony the applicant said:
• When she was charged by the third respondent, she
knew very well that the allegations in the charge
pertained to the stock which was described in the list
of the high value stock. The list was contained in a
letter which the third respondent had previously
served on her. She did have sufficient time to prepare
16
for the disciplinary hearing.
• She well knew that in the receiving departments of the
third respondent, one of the ways through which
shrinkage occurred was when the staff did not follow
receiving procedures. She also knew that the third
respondent regarded a failure in the following of
procedures which resulted in shrinkage, as a serious
transgression of its rules.
• The third respondent had recordings of stock initially
done through a computer system which was
subsequently changed in favour of another computer
program called the SAP system. She received training
for the SAP system. Initially the training was done
internally by the third respondent with the result that
she experienced problems with the SAP system. The
problems with the SAP system lasted longer than three
months, such that Ms Ndyimbana who came to assist
her left for and returned from her maternity leave
while there were still such problems. From the
inception of the programme, the system did not work
100%. But for the fact that the system was faulty,
none of the problems would have arisen. Two
examples of her problems pertained to her inability to
transfer or post stock from her location S002 and
secondly, her inability to access the storage location
S002 in the computer system due to her inability to
print out a stock holding document. The third
respondent brought into the branch, people who had
17
installed the SAP computer system with a view to
addressing the problems of staff with the SAP system.
That helped her resolve her problems with the system,
subsequent to such external training. Mr Nobinda even
printed a stock holding document through which she
was able to see what stock was in her computer
system.
• During the initial application of the SAP system, she
found it impossible to post stock out of S002 location
when such stock was brought to her cage from the
sales floor. She reported the problem to her
supervisor, Mr Robb, whom they regarded as the
super user of the system. In order to transfer such
stock to the suppliers, she was authorised to transfer
the same through the S001 location straight to the
suppliers. The consequence of so doing was that a
stock imbalance was created in that her location
records remained with a surplus of stock which had
physically been sent out for repairs or returned to
suppliers, while a surplus of stock was created in the
records of location S001 when the transfer of stock,
which was not in that location, was done.
• When the staff at the front returns posted some stock
to the cage to be actioned upon, some of such stock
was never physically brought to her so as to balance
with the computer posting. That also created an
imbalance in her stock which she could not detect as
she received no warning of the same in the computer
18
system. She only became aware of such posting when
personnel physically came to her with the stock
whereupon she then signed acknowledgement of it.
The problem was firstly addressed by Mr Nobinda
when he directed the front returns clerk themselves
not to do post stock to location S002 but to have the
returns clerks themselves do the posting in their own
computer system upon physical receipt of such stock.
Mr Nobinda later reverted to the previous system but
introduced the printing of all stock when the same was
transferred from the front returns to S002. That served
to warn the returns clerk of the stock they were to
receive from the front returns even before it was
physically brought to them, whereupon they were able
to compare it with their data. Once the SAP was in full
swing, she was even able to reverse any posting of
stock whence it came, if she had not received the
physical stock in respect of which the computer
transfer was done.
The listed high value goods
• She was given a document derived from the inventory
of storage location report in which the high value
stock was listed to investigate and give a report back
on why such stock, although it was in the computer
recordal, was physically not in her cage location. Mr
Nobinda had granted her time extensions during
which an explanation was called for. She worked
together with Ms Ndyimbana in responding to the
19
enquiry and they responded as and when such stock
was found. It was not true that she never responded.
• It was her duty to ensure that whenever stock came
onto the cage, it was registered into the computer
system. Whenever stock was physically removed from
the cage, she had to create a document which
accounted for it, such as goods return note and a
goods repair note with the result that such stock would
be subtracted from the computer records.
• Among the items in the list, a silverline computer was
sent out on 4 February 2002 through location S001 to
the supplier with a goods return note. The supplier
signed acknowledgement of the computer on the
goods return note which had originally been generated
when the computer was posted. The goods return note
was with the third respondent’s documents. She had
not requested a goods return note from the third
respondent because of lack of knowledge that it would
be needed. The supplier brought the computer back
and a return reversal note was made with the computer
posted to the sales floor on 10 May 2002.
• In posting the stock to the sales floor, the SAP system
could not allow her to “punch back” the goods return.
She had to create an order and then she made a
reversal on the goods return note. She informed Mr
Nobinda of the problem, whereupon he telephoned
head office as the specific article number had been
blocked. Head office officials opened the article
20
number and the order was created and the goods
return was reversed. At the sales floor, she handed the
computer to one employee known as Allie.
• Whenever she was transferring an article to the
suppliers, she noted the tracking sticker thereof. On
the return of the article, she checked the sticker to
confirm that the article returned was the same article
she had sent out. Then and only did she proceed to
sign the waybill. She showed the documentation to Mr
Nobinda.
• There were items on the list on which shrinkage
reversal was made and for which she made out a
goods return note. These would be items which were
found to have been surplus on the sales floor. While
surplus on the sales floor could be caused in various
ways, in the instant case, such was created when stock
from location S001 was transferred instead of a
transfer from her location S002. She made out goods
return notes for such stock wherein the recipient
would sign. She handed all such notes to the third
respondent during her employment period.
• In respect of two Canon Cameras and a hand palm top
there were goods return notes. The notes were bearing
a date in June 2002 because it was in that month that
the supplier came to collect the stock and it was
transferred in June 2002 from the cage location where
it had been. Neither herself nor her attorney had asked
for the goods return note from the third respondent,
21
during the appeal hearing. She could not recall if it
was ever put to Mr Nobinda that the goods return note
in question existed.
• She had reference numbers of the goods return notes
for the items in the high value stock list. She had used
the same during the appeal hearing. The references
were in a 6 page note.
• On 20 May 2002 the SAP system was working in full
swing. She noted on a print out that the front returns
staff had accessed the cage computer system
whereafter they posted an Epson printer to the cage
location without bringing the printer to her. She put a
cross mark on the corresponding space of the print out
and proceeded to reverse the transaction to the floor
location S001. One of the shop floor staff signed the
print out to confirm the fact.
The Milnerton transfer
• She parcelled the stock as it was required and the
security guard checked what was being packed. She
then signed relevant documentation and sealed the
boxes. The security guard did not sign the
documentation before the packs were sealed because
the stock was not to be dispatched on that day, a
Saturday. It was only on Monday that the boxes were
dispatched and the security guard who was on duty
counted the boxes and signed documentation thereof.
While that security guard did not oversee the packing
22
process on Saturday, he had been present and she had
seen him speaking to the one who had supervised her
when she was packing the stock. She would have not
made the mistake on the number of stock which she
packed.
Stock subsequently discovered
• On 02 February 2002 she did transfer 175 items of
stock from her computer location S002 to location
S001 from location S001, the stock was transferred to
suppliers. Initially the same stock had been transferred
from location S001 to S002, whence it was transferred
back. Such posting was not accompanied by a
physical transfer of similar stock from the cage to the
front sales. The effect of the computer transfer was the
reduction of stock by 175 items from her computer
records. She had been instructed by Mr Robb to effect
the transfer. Accordingly, the transfer was not
effectively a scam, nor was it irregular. She did not
know why it had not been put to Mr Nobinda that Mr
Robb had authorised the transfer. There was a
document in the bundle to prove that all 175 items
were returned to the suppliers.
• All 175 stock was transferred on one goods return
note. That included Best Duty Plant Potjie. The goods
return note was not in the computer system and was
nowhere to be found. As she was about a year out of
the employ of the third respondent, she could not have
known what happened to the goods return note in
23
question. She had searched for it at the third
respondent’s shop in vein.
• There was a bundle of documents she had which had
records of the transfer of stock from S001 to suppliers.
[The matter was postponed to allow the witness to
peruse the bundle. Matter proceeded on resumption].
• Not all 175 items were returned to the suppliers per
goods returns notes as some were forwarded through
the stock repair note while the rest of the bundle had
never been brought to her storage location. She did not
have the original transfer notes with signatures to
acknowledge such stock. She asked for the same from
the third respondent but was only given reprinted
copies.
• Of the 175 items, she agreed that only 21 had been
returned to the suppliers from storage location S001.
The Best Duty Plant Potjie with article number
1857297 was an example of stock which had not
physically been transferred to her location but was
computer posted to S002. A goods receipt note was
generated thus showing stock movement. A similar
erroneous transfer was of Plascon paint.
• An administration Manager, Mr Ali Pieterson took all
original transfer notes from her once she had finished
working on them. The notes included those for
internal departmental transfers. It was during the
investigations of the matter that some of the notes
24
were given to Mr Nobinda. During the appeal hearing,
it was stated that Mr Nobinda had been given original
signed notes.
[23] When Mr Wade was crossexamining the applicant, he put a
number of challenges to her version. One such challenge was to
call upon the applicant to produce proof of a transfer of any one of
the stock appearing in the list of high value goods. She identified a
computer with the number 4367 which was transferred on 04
February 2002 from location S001 to S002. She said that she then
made a goods return note on the very day and dispatched the
computer to the supplier using location S001 because of the
problem she had with location S002. She said that the computer
came back through the return reversal. She forwarded it to the front
sales. She involved Mr Pieterson and Mr Nobinda in processing the
documentation thereof. From the list of the high value goods the
applicant gave an explanation, which the third respondent
accepted, in respect of two cameras and a computer.
[24] The further challenge related to what Mr Wade referred to as a
failure on the applicant to present evidence that some original
transfer documents were given to Mr Nobinda by the applicant.
She was given a chance to peruse the minutes of the disciplinary
and appeal hearings whereafter she identified two of such instances
in the minutes of the appeal hearing.
[25] After the third respondent had dismissed the applicant, it found that
there were 175 items of stock in the cage which were not properly
accounted for. Mr Wade challenged the applicant into producing
documentary proof that such stock had been properly transferred
from S002 by the applicant. The arbitration hearing was postponed
25
to allow the applicant to produce such proof. When the proceedings
resumed, Mr Wade put it to the applicant that 21 of the 175 items
had been posted to the suppliers. The initial response of the
applicant was in agreement with the proposal. Later she appeared
to be uncertain of the exact number. It therefore became common
cause between the parties that, at least 21 of the 175 goods were
not in issue between the parties.
The arbitration award
1. Substantive Fairness
[26] The second respondent found, inter alia, that:
The applicant was not a credible witness. Ms Ndyimbana
testified against her. Mr Nobinda was unshaken by vigorous
crossexamination. He was coherent and consistent.
The trust of the applicant’s case was that the SAP system did
not operate the way it should have. It was faulty and caused
an imbalance. It did not permit her on certain occasions, to
transfer goods out of storage location S002 or the cage. She
claimed, “ If the system was 100%, she would have done her job
correctly”. This created an impression that the applicant
wanted to admit that she was negligent.
According to the third respondent, the missing items, except
three items on the list of high value stock, formed the basis
of the dismissal of the applicant.
The witness for the third respondent as well as the witness
for the applicant testified that a backup or manual system
was in place despite the existence of the SAP system. Even
26
the applicant alluded to that fact. He therefore could not
accept her argument that the system was faulty and would
not allow her to transfer goods from the cage. The applicant
on the one hand testified that her key function was to record
the movement of stock but on the other hand she could not
explain what had happened to the missing stock. At the very
least, she could have been able to produce some documents
to verify her defence.
She maintained that she had passed inter departmental
posting documents onto Mr Nobinda but she failed to
challenge him on that. During crossexamination, she
testified that she had passed the same documents onto Mr
Pieterson. Also during crossexamination, she claimed that
the respondent had either destroyed those documents or
refused to make them available.
The fact was that the third respondent’s records, which
proved the stock movement, did not support the applicant’s
version. The stock movement reports indicated that only
certain of the items on the list were transferred out of the
storage location to be returned to the supplier. The
applicant’s defence did not explain why the items on the list
were missing from the cage.
The applicant was responsible to control the movement of
stock. Her actions neutralised the third respondent’s
shrinkage system.
He had to conclude that the applicant was grossly negligent
as she breached her fundamental responsibility to accurately
27
record stock movement. She failed to control stock whilst
acutely aware of the prevailing system and procedures, as
also the importance of the controlling shrinkage.
Before any disciplinary charges were laid against her, the
applicant was requested to clarify the missing items on the
list. She was given ample opportunity to do her own
investigations and to report back. Her failure to report back
to management was viewed in a serious light.
Where the negligent was so gross that it could be held that
the employee foresaw or should reasonably have foreseen
the possibility of damage to property or assets, it will be
sufficient to justify dismissal.
2. Procedural Fairness
[27] The further findings by the second respondent were, in this respect,
inter alia, that:
The applicant was afforded a fair opportunity to state
her case both in the initial disciplinary hearing and in
the subsequent appeal hearing. The applicant’s
contention that the chairpersons were biased or did not
consider mitigating factors was not supported by the
minutes of the enquiries. The chairperson of the
appeal hearing reinstated the applicant in order to
advance her endeavours to locate the missing items.
That conduct did not convince him that the
chairperson was biased against her. She had also not
challenged the alleged biased during the hearing and
28
could not challenge it thereafter.
The claim of the applicant that the charge against her
was vague was without substance.
There was no basis for concluding that the third
respondent acted in any way procedurally unfairly in
pursuing the charge against the applicant.
An appropriate test for dismissal was whether the
conduct of the employee had the result that the
relationship was damaged or destroyed or its
continuation was rendered intolerable. Dismissal was
always justified when an employee was found guilty
of a serious act that had undermined the relationship
of trust between the employer and the employee. It
was doubtful whether the third respondent would trust
the applicant again.
[28] He concluded that the dismissal of the applicant was not unfair and
that she was not entitled to any relief.
Grounds for review
[29] The review application is premised on the submission, firstly that
the award is irrational and unjustifiable and secondly that the
second respondent failed to apply his mind to the issues at hand
and thus committed a gross irregularity or misconduct.
Analysis
[30] The applicant has placed her reliance on section 145 of the Act for
29
this application. In so far as is relevant here, section 145 reads:
145 Review of Arbitration awards
“(1) Any party to a dispute who alleges a defect in any
arbitration proceedings under the auspices of the
Commission may apply to the Labour Court for an order
setting aside the arbitration award
(a) within six weeks of the date that the award was served on the applicant, unless the alleged defect involves the commission of an offence referred to in part 1 to 4, or section 17, 20 or 21(in so far as it relates to the aforementioned offences) of Chapter 2 of the Prevention and Combating of Corrupt Activities Act, 2004; or
(b) if the alleged defect involves an offence referred to in
paragraph (a) within six weeks of the date that the
applicant discovers such offence.
(2) A defect referred to in section (1), means –
(a) that the commissioner –
(i) committed misconduct in relation to the ,duties of the
commissioner as an arbitrator;
(ii) committed a gross irregularity in the conduct of the arbitration proceedings; or
(iii) exceeded the commissioner’s powers; or
b) that an award has been improperly obtained”.
[31] The first review ground raised is that the award is irrational and
unjustifiable. The decision in Carephone (Pty) Ltd v Marcus
N.O and Others (1998) 19 ILJ 1425 (LAC) provides an
appropriate guidance in this respect. In paragraphs 30 32 of his
judgment, Froneman DJP had this to say:
“[30] It appears from a number of decisions of the High Courts
that the effect of, particularly, the administrative justice
section in the Bill of Rights is seen as broadening the
scope of judicial review of administrative action (See
30
Tseleng v Chairman, Unemployment Board and another
(1995) 16 ILJ 830 (T); … [31] The peg on which the
extended scope of review has been hung is the
constitutional provision that administrative action must be
justifiable in relation to the reasons given for it (s 33 and
item 23 (b) of schedule 6 to the constitution). This
provision introduces a requirement of rationality in the
merit or outcome of the administrative decision. This goes
beyond mere procedural impropriety as a ground for
review, or irrationality only as evidence of procedural
impropriety. [32] But it would be wrong to read into
this section an attempt to abolish the distinction between
review and appeal…”
[32] Froneman DJP proceeded to set a test for the review of an award
that is assailed on irrational basis as:
“… Is there a rational objective basis justifying the connection
made by the administrative decision maker between the material
properly available to him and the conclusion he or she eventually
arrived at”
[33] Then came, among others, the decision in Shoprite Checkers
(Pty) Ltd v Ramdaw NO and others (2001) 22 ILJ 1603 (LAC)
which was arrived at after Zondo JP had carefully examined the
Carephone decision. He reached a conclusion, inter alia, that the
term “justifiable” which had been used in the Carephone case,
although not synonymous to the term “rational”, bears a sufficiently
similar meaning to justify the conclusion that rationality can be
said to be accommodated within the concept of justifiability as
used in Carephone. He held that a decision that is justifiable
cannot be said to be irrational and a decision that is irrational
31
cannot be said to be justifiable.
[34] The second ground of review is that the second respondent
committed a gross irregularity. It is not merely a highhanded
arbitrary conduct which is described as a gross irregularity.
Behaviour that is described as perfectly intentional and bona fide,
though mistaken may come under that description. The crucial
question is whether it prevented a fair trial of the issues. See
Goldfield Investment (Pty) Ltd and another v City Council of
Johannesburg and another 1938 (TPD) at 560.
[35] The first attack on the award is based on the second respondent’s
conclusion that the trust of the applicant’s case was that the SAP
system did not operate correctly or 100% with the result that she
was not able to transfer goods in and out of a specific storage
location, S002. That then created an impression in the mind of the
second respondent that the applicant wanted to admit that she was
negligent. To this, the submission by the third respondent is that
the applicant’s own witness testified that, quite regardless of the
problems with the SAP system, a proper backup or manual system
would have enabled the relevant articles to be traced one way or
the other.
[36] A proper reading of the evidence of the applicant, in my view, does
not in any way justify this impression that she wanted to admit that
she was negligent. At the time she was responding to a question
that probed whether she agreed that she was negligent in not
following the simple posting procedure. Her first part of the answer
was that she did not agree that she was negligent. She went on to
say that had the system worked 100% it would have made her
posting task easier. I am however unable to agree with the
32
applicant that the impression created in the mind of the second
respondent is an irrational or unjustifiable conclusion. The second
respondent clearly misdirected himself in allowing such an
impression. He however did not stop with that impression but went
on to assess the rest of the evidence. Individually, this misdirection
does not indicate to me, that he necessary failed to apply his mind
to the issues at hand. See S v Pillay 1977 (4) SA 531 AD at 534.
[37] The applicant submitted that it was common cause that there were
problems with the SAP system. She says further that, the problem
impacted directly on her in that it did not allow her to generate
goods return notes and therefore could not perform her functions as
she was trained on the SAP system. She said that how it impacted
on her duties was common cause. I do not agree with these
submissions. There are instances where Mr Forbes sought to elicit
a concession from Mr Nobinda that the SAP system was
problematic. He did not succeed. Mr Nobinda conceded though,
that Mr Robb had testified, in the disciplinary hearing, to the effect
that the SAP system had problems. Mr Nobinda clearly did not
share the same view as Mr Robb. Mr Nobinda said that the stock
posting process was very clear to somebody who had been trained,
who knew how the system worked. He said that all there was, was
to post, or transfer stock to location S002 and from there the stock
could be posted to S001, thus generating a posting document on
which stock recipient would have to sign. That, he said, had the
result of reducing stock on the location system of S002. The same
effect would result if the stock were transferred to the suppliers
through a goods return note. Mr Nobinda displayed a
comprehensive understanding of the SAP system such that his
image, as a truthful witness was left untouched. When called upon
33
to, and when given a chance, he gave details of how the system
worked. The transcript record showed it out.
[38] One aspect of Mr Nobinda’s evidence which stood conspicuously
out, was his appreciation of the lack of understanding of the SAP
system by Mr Robb, the applicant and some other staff of the third
respondent. According to his evidence, that is where the problem
lay, and not with the system itself. I find support for this in the
evidence of the applicant herself. Before the intervention of Mr
Nobinda and the SAP system support staff, the applicant had
problems with the system. After such intervention, she even spoke
of the SAP system working in full swing on 20 May 2002, her last
working day.
[39] It was an undisputed fact that, at some stage, Mr Nobinda, stopped
the front returns staff from posting stock to the cage. Instead they
had to physically bring such stock to the cage whereafter the
returns clerk posted the stock into their location S002. That worked
well. He thereafter reversed the procedure but introduced the
printing out of whatever stock that was transferred from S001 to
S002. The return clerks were then able to see what stock had been
put into their system. Where it was not physically brought, they
were able to query that or reverse the posting.
[40] In respect of how the SAP system worked, I accordingly find no
justification in any attack on the second respondent’s acceptance
thereof.
[41] The next submission of the applicant related to the finding of the
second respondent that the applicant could not explain what had
happened to the missing stock and that, at the very least, she should
34
have been able to produce some documents to verify the defence.
The applicant submitted that the second respondent ignored
material evidence and so committed a gross irregularity. The
submission by the third respondent, in this respect was that, not
identified at all, was the evidence supportive of the conclusion that
the documents comprising the annexure, in fact explained all the
missing items. On any assessment of the evidence, they clearly did
not. What the third respondent has done in this respect is to accept
the existence of such documentary evidence and thereafter assessed
its evidential weight. That is not what the second respondent did,
he rejected the existence of such documentary evidence, in so
doing he closed the door for its evidential assessment. That, I find
was a misdirection on his part which denied the applicant of a fair
trial of the issues at hand. In this respect, the second respondent
committed a gross irregularity as suggested by the applicant. See
Reunert Industries (Pty) Limited t/a Reutech Defence
Industries v Naicker & others (1997) 12 BLLR 1632 (LC) at
1636 DH.
[42] Another attack on the respondent was towards the finding by the
second respondent that where the negligence was so gross that it
could be held that the employee foresaw or should reasonably have
foreseen the possibility of damage to property or assets, it will be
sufficient to justify dismissal. The third respondent submitted that
there was absolutely no substance to the applicant’s criticism of the
arbitrator’s alleged finding in this regard. It was submitted that, on
any reading of the arbitrator’s award, it is clear that the extract
quoted by the applicant represented the arbitrator’s own reference
to an academic work. It remains unclear to me why the second
respondent took the trouble of making reference to an academic
35
work, in the manner he did in this case. I need say no more.
[43] The applicant submitted that the finding by the second respondent
that it was doubtful whether the third respondent would trust the
applicant again was unjustifiable and irrational. She correctly
pointed out that no evidence was adduced in that regard and that, in
fact, it was never the third respondent’s case that the relationship
had broken down. A comparison of the evidence, which was
properly available to the second respondent and the conclusion he
reached in this respect, shows, in my view, an absence of a rational
objective basis which would justify such a connection.
[44] In his analysis, the second respondent began by noting that section
192 of the Act placed the onus to prove that a dismissal is fair and
just on an employer party. After listing those facts found to have
been common cause between the parties, he immediately made an
adverse credibility finding against the applicant. He found that the
witness for the applicant testified against her. He then found that
the sole witness for the third respondent was not shaken up despite
vigorous crossexamination. He proceeded to make a favourable
credibility finding in favour of the third respondent. As he began to
analyse the evidence, he started with the evidence of the applicant.
He interposed by briefly stating the evidence of the third
respondent to the issues canvassed by the applicant. This approach
is conspicuous throughout his analysis of the evidential material
until he reached his final conclusion.
[45] I cannot help but observe that the second respondent, even after
stating the law correctly on where the onus of proof laid, he at least
unconsciously, placed the onus on the applicant. In so doing, the
second respondent denied the applicant a fair trial of the issues and
36
thus committed a gross irregularity.
[46] Had the second respondent approached this matter appropriately,
he would have found that what the third respondent did, was to
produce an inventory of the stock which was supposed to have
been in the cage. I put aside for a moment that evidence which
pertained to how the SAP system worked. Thereafter the third
respondent called on the applicant to give an account of the
whereabouts of such stock as was listed in the inventory. The
method followed when an item of stock was posted to the cage or
S002 location was never adopted by the third respondent in
presenting its case.
[47] It behoved of the third respondent to have produced proof of
documentary nature, of all items of stock which it alleged had been
transferred to the cage location. That would have been proof of the
physical transfer of the stock to the cage. The third respondent had
the means and personnel to use to achieve this goal. Instead, it
relied on the computer records and possibly on some admissions by
the applicant for the physical receipt of some of the stock.
[48] When the applicant produced proof that not all the stock in the
computer recordal or inventory, had been physically brought to the
cage, the second respondent should have been alerted to the
weakness there was in the third respondent’s case. When the
applicant slowly began to meet up to the challenges thrown at her
by Mr Wade, even if it is conceded that new discrepancies were
thereby introduced, the second respondent should have realised that
the adequacy of proof in the third respondent’s case was under
serious attack. The consequence is that the applicant was burdened
with an onus which never was hers, in the first place.
37
[49] The negligence of the applicant could only be proved in respect of
the stock which was not only in her SAP system but which would
have been proved to have been physically brought to the cage. In
the absence of the second leg proof, she could not rightly be
accused of being negligent in respect of stock which she might not
have even physically received in the first place.
[51] In challenging the award, the applicant submitted, as already
pointed out, that the second respondent committed a gross
irregularity. She however failed to place reliance of the defect on
section 192 of the Act. A court of law and equity would, in my
view, not permit such gross irregularity to escape detection.
[52] The finding of the second respondent on the procedure, in my
view, merits no criticism.
[53] A proper conspectus of all the evidential material before me
informs me that the award of the second respondent is to be
reviewed and set aside.
[54] The applicant has asked that in the event of the application being
granted, she be reinstated. There is no evidence that the working
relationship between the applicant and the third respondent was
damaged or destroyed. Both Mr Nobinda and Mr Robb have since
left the employ of the third respondent. They were the supervisors
and even in relation to them, there appeared to have been no
element of animosity towards the applicant. After the intervention
of Mr Nobinda, except for the charge, the applicant appeared to
have had a better understanding of the SAP system. Accordingly
reinstatement appears to me, to be appropriate, the issue of the 175
38
items of the stock notwithstanding.
[55] The decision in Chemical Workers Industrial Union & Others v
Latex Surgical Products (Pty) Ltd (2006) 27 ILJ 292 (LAC)
provides me with the guidance on retrospective reinstatement.
Zondo JP stated the law in paragraph 116 thus:
“In the light of all the above, I conclude that it is not competent
to order retrospective operation of a reinstatement order (even if
limited) which is in excess of 12 months in an ordinary unfair
dismissal case. In this matter, retrospective operation of the order
of reinstatement that I propose to grant has to be 12 months or
less, but not more. That is part of the limitation on my discretion
to order that reinstatement of the individual appellants operates
with retrospective effect.”
[56] The applicant was dismissed by the third respondent on 30 April
2002. This is apart from the brief reinstatement consequent upon
the appeal hearing. Four years have since gone by. The award
being reviewed is dated 19 August 2003, which is almost three
years to date. The period of retrospective reinstatement may
however not be more that 12 months.
[56] Accordingly the following order will issue;
1. The arbitration award of the second respondent dated 19 August
2003 in case number EC 371602 is reviewed and set aside.
2. The third respondent is ordered to reinstate the applicant to the
position which she occupied on dismissal or to one of equal or
better ranking with effect from 04 August 2006.
3. The third respondent is ordered to give the applicant any
39
additional and improved benefits which have since been
instituted, if any,
4. The applicant is to be compensated for the lost wages and
benefits from 04 August 2005 until the date of reinstatement.
5. The applicant is to report at the premises of the third respondent
at Port Elizabeth for duty on 07 August 2006 at 08H00.
6. The third respondent is ordered to pay the costs of this
application.
CELE AJ
________________ACTING JUDGE OF THE LABOUR COURT
OF SOUTH AFRICA
Date of hearing : 14 November 2005
Date of Judgment: 04 August 2006
Appearances
For the Applicant : Mr J Forbes
Instructed by : JOSEPH FORBES ATTORNEYS
For the Respondent: Mr R Wade
Instructed by : CHRIS BAKER & ASSOCIATES’
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